‘Lazy’ retailers urged to change their ways

IT and electronics retailers that've failed to develop satisfactory in-store experiences could find their days are numbered

IT and electronics retailers that have failed to develop satisfactory in-store experiences could find their days are numbered unless they take a more proactive approach to serving customers in the current climate.

That’s the stark warning issued by research house Datamonitor, which has advised UAE retailers that low prices alone are no longer enough to sustain a loyal customer base.

The company has carried out direct consumer research and in-depth interviews with industry leaders to identify a number of best practice recommendations, which it says retailers and manufacturers can implement to survive and even exploit the current downturn.

This includes stressing a product’s value proposition — as opposed to cheapness — improving customer service levels and maintaining marketing budgets and better targeted product ranges.

Datamonitor believes “considerable opportunities” exist for companies capable of focusing on the whole retail experience because each customer’s experience will need to be more fulfilling as they guard their wallets with extra caution.

“For many years, manufacturers and retailers here have thought, ‘if I build it, they will come.’ They boast year-on-year increases in sales, thinking this means they have got their strategy right. Well, now they are realising that growth was easily explained by underlying demographic and economic growth,” said Imran Ahmed, head of strategy and consulting MENA at Datamonitor.

He continued: “They had no real insight, and they had built lazy, unsatisfactory experiences for consumers. Those forward-looking firms that put the consumer at the heart of their strategy will survive. The number of firms coming to Datamonitor and asking us to help them understand their customer psychographics and optimise product development has never been higher.”

Datamonitor expects retail spend to fall in the electronics goods sector, but insists proactive retailers and manufacturers can grow their market share through a combination of increased advertising, strategic physical expansion and price leadership.